)
Insurance penetration in India has fallen for the second time after the sector was opened for private players. The Insurance Regulatory and Development Authority (Irda), in its annual report for 2012-13, said insurance penetration stood at 3.96 per cent, while insurance density stood at $53.2 for 2012.
The measure of insurance penetration and density reflects the level of development of the sector. While insurance penetration is measured as the percentage of insurance premium (in $) to GDP (in $), insurance density is calculated as the ratio of premium (in $) to total population.
Insurance penetration stood at 3.96 per cent of gross domestic product in 2012, down from 4.10 per cent in 2011. Similarly, insurance density fell $53.2 in 2012 compared to $59 in 2011.
“This indicates that in the past three years, the growth in insurance premium is lower than the growth in national GDP,” said Irda.
On the life insurance side, the density fell 3.17 per cent in 2012 from 3.40 per cent in 2011. Life insurance density also fell to $42.7 in 2012 from $49 in 2011.
Non-life segment, however, has seen a marginal increase in penetration and density. Insurance density rose to $10.5 in 2012 from $10 in 2011. Non-life insurance penetration, though was still under one per cent, rose from 0.70 in 2011 to 0.78 in 2012.
